New Delhi: Uttar Pradesh Government on Thursday ruled out slashing sales tax on petrol and diesel as has been done by some other States to partly offset the recent increase in petroleum prices.

``We don't have any such intention (to reduce sales tax on petrol and diesel) as the revenue from this tax goes for development works,'' State Agriculture Minister Ashok Bajpai told reporters on the sidelines of the VAT panel meeting here.

He said Uttar Pradesh imposes one of the lowest sales taxes on petrol and diesel compared to other States. The State levies 25 per cent sales tax on petrol and 20 per cent on diesel.

Mr. Bajpai also demanded 25 per cent subsidy from the Centre on value of diesel used by the farmers.

The Centre on June 5 raised the prices of petrol by Rs 4 a litre and diesel by Rs 2.

Following such a steep hike, some State governments slashed the sales tax to tone down the effect of price rise.

Maharashtra, Andhra Pradesh, Tamil Nadu and Delhi have already effected the change in the sales tax structure to mitigate the price hike in petrol and diesel.

In a letter to Union Petroleum Minister Murli Deora and Agriculture Minister Sharad Pawar, Mr. Bajpai said the subsidy is required to ensure that farmers do not leave farming.

Because of rising input costs, agriculture is becoming unbearable and a loss-making venture, he said.

Uttar Pradesh, besides Tamil Nadu, has not introduced VAT so far. Speaking on VAT, the Minister said no decision had been taken on introducing VAT in the State.

PTI

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